By Lisa Erdmier, Chart-Ex, LLC

Chicago, March 8, 2004 - The Chicago Board of Trade (CBOT) today announced that it shattered its single day volume record, ... Exchange electronic daily volume records reached on Friday included:...; the CBOT mini-sized $5 Dow futures reached 93,096 contracts, compared to the old record of 91,831 contracts set on January 15, 2004"

Chicago, March 11, 2004 - The Chicago Board of Trade (CBOT) announced today that volume in its CBOT mini-sized Dow Jones Index futures surpassed the100,000 benchmark yesterday and set a new daily trading record of 103,950 contracts.  The previous record of 93,096 contracts was set on March 5, 2004.

Chicago, March 12, 2004 - The Chicago Board of Trade (CBOT) announced today that CBOT mini-sized Dow futures traded 155,922 contracts on Thursday, March 12, 2004, while the Dow Complex traded 200,056, up 50% and 79% from previous records.

As you can see from the above press releases, the volume traded in the mini-sized Dow is setting new records almost daily. One of the biggest benefits of the increase in volume for traders is that it adds liquidity to the market. To be able to pinpoint the volume distribution at each price, a trader can get important signals for entry/exit points in the market. Volume is the driving force of the market's dynamics.

A number is a just a number; but by knowing the "value" of a number you are gaining an in-depth understanding of the market dynamics.  "Volume at price" puts a "value" on numbers; it will show you the strength or weakness of a market number. The "value" of the number can be determined by identifying which prices attract high volume and which prices attract low volume. If there has been high volume at a certain price for the day, week and month, when the market reenters that trading area there is a high probability that that price is going to attract high volume again and become a support or resistance area. Traders are going to protect their position at these areas. You can determine your entry/exit points by gauging historical price volume data.

Theoretical Examples of using historical price volume data for entry/exit points:

1. The mini-Sized Dow is making new highs for the day, but not for the week or month. Do you want to sell as the market is making new highs for the day; thinking that the market will back down or do you want to buy as the market is making new highs for the day; thinking that the market momentum is going to continue on the upside. What do you want to see to confirm your entry/exit point?

• The Book will show you the size of the current bids and offers. This will give you an idea on the current demand, but are those bids/offers there to stay? Looking at historical price volume will give you an indication of the "value" of the bids and offers. Historical price volume is stagnating; it has been there for the day, week and month. If historical price volume shows high volume at the new high or just above the new high, you can gauge you entry/exit point by taking into account that that area has had past high volume and you will probably become a resistance area.

2. The mini-Sized Dow is approaching a number that happens to be a Fibonacci number and/or a Moving Average number. Is the market going to use these numbers and if so, by how much?

• Here the historical price volume data will confirm the strength or weakness of the Fibonacci number and/or Moving Average. If there is historical high volume at the Fibonacci number and/or Moving Average number a trader can confirm an entry/exit point by accessing these two dynamic market factors coming together at that price.

3. The mini-Sized Dow has been moving higher for the last few days with daily gaps. Let's say there is a gap from Monday's trade at 10605 to10650, a 45 point gap and the market closes at 10680. On Tuesday the market trades back down to the 10650 area, where do you put you entry/exit point?

• A bar chart will show you the numerical boundaries of the gap. By seeing the price volume distribution right above the gap you can pinpoint the true support of the gap. If the high volume area is at 10655, you will see the first signs of support coming in here for the gap. The support area would be 10655-10650.

Real time examples of using historical price volume data for entry/exit points:

Summary
The advances in technology today have allowed traders to buy and sell the mini-sized Dow in a nanosecond. Click; BUY. Click; SELL. In that reflexive movement, traders want and demand confidence in their trading decision. Confidence is achieved by years of experience, gut feelings, and an assimilation of a wealth of market information, fundamental and/or technical. Volume at price is information that traders are looking at today; in the Book and /or historically. There is no secret formula that is going to tell you when to buy or sell, but to have one more key piece of information is critical to your trading decision; Volume at price.

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About the Author
Lisa Erdmier is President of Chart-Ex, LLC. Chart-Ex is a web based company that offers a new proprietary data visualization tool that displays comparative price action on a single central axis with cumulative volume at each price. The Chart-Ex display keys into the growing demand from traders and investors that want to see volume at price in one concise model.

The Chart-Ex displays above facilitate in determining market entry/exit points. Click on www.chart-ex.com to use the FREE trading tool that uncovers the dynamics of the market's momentum.

Chart-Ex's co-founders, Lisa and Doug Erdmier, each have over 25 years experience and involvement in the securities and futures markets. Lisa Erdmier began her 25-year plus involvement in commodities and equities as a technical analyst for Merrill Lynch, John Eckstein, and Discount Corporation. Doug Erdmier, a long-standing Board of Trade Member, has gained a trader's knowledge of the motivations of market players and uses this knowledge to develop trading tools which facilitate the analysis of market data.

If you trade CBOT Dow futures and are interested in submitting a strategy for publication on the CBOT Web Site please contact us.

The information in this commentary is provided from sources believed to be reliable, but the Chicago Board of Trade does not guarantee its completeness or accuracy. The opinions expressed within the commentary may change without notice. The commentary was prepared for general circulation and does not have regard for the particular circumstances or needs of any specific person who may read it. Neither the information nor any opinion expressed in the Commentary constitutes a solicitation for the purchase or sale of any futures or options contracts.